£20m black hole for city regen firms

The regeneration companies responsible for large redevelopment schemes in Manchester and Salford are set to lose almost £20m through the collapse of the Northwest Regional Development Agency (NWDA).

New East Manchester will have to deal with an £11.4m black hole in its budget and Central Salford URC will lose £8m as the NWDA closed its doors to former funding partners.

Those are the amounts received by the organisations for 2009/10 and cover projects and operational costs. For New East Manchester, it means a reduction in its operational budget of a third, or £600,000.

The loss of funding may force New East Manchester to reassess staffing levels – it currently employs around 120 people – although there is no suggestion of redundancies.

New East Manchester staff are employed on Manchester City Council contracts, which has no formal redundancy policy. Redeployment into other roles could be a more likely outcome.

A spokesperson for New East Manchester said: "Currently we're in discussions with Manchester City Council with regard to future funding arrangements beyond 2010/11”.

Other quangos to lose out in the spending cuts, which will kick in next March, include Manchester’s inward investment agency, MIDAS, which will lose £1.5m, and Manchester Knowledge Capital, which received £282,000 from the NWDA for 2009/10. Pro.Manchester, the organisation for Manchester professionals will lose is £280,000.

Sources close to the NWDA also suggested that Marketing Manchester, which promotes the city as a tourism destination, could see its budget cut by the agency, despite escaping in yesterday’s announcement.

Manchester City Council criticised the cuts as “short-sighted” although would not comment further on how the loss of funding might be replaced.

Nobody at Marketing Manchester was available for comment.

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"short sighted" maybe...but Manchester City council in a grab for prestige look like they will be cutting off their nose to spite their face. They want their own LEP via which they will bid into the new regional growth fund. that fund will be administered from Whitehall (Coalition "decentralisation" don't you know!) and will be worth £1bn over two years for the whole of England...

RDAs had c. £2bn a year with greater amounts going to the north than the south. Getting rid of them (to get the LEPs) is simply a way of cutting the funding that places like Manchester have come to rely on for many 'projects'. The pursuit of the LEP is what is 'short sighted'...

Anonymous, I think Manchester City Council is a Labour council and the LEPs have been introduced by the Tory/Lib government. A couple of weeks ago Bernstein was advocating there still being a regional body, so not quite sure what your point is. £1bn is better than £0bn, so they would be incredibly obtuse not to go for the funding for greater manchester (I knew my economics degree would come in useful some day).